OPEC mulling over limiting Libya, Nigeria’s rising oil pump

The OPEC production-cut agreement was meant o bring the world’s oversupply of oil back in line with demand and thereby boost slumping crude prices. Instead, the petroleum market has remained depressed this year, with prices stuck below $50 a barrel as oil supplies remain high. (Bloomberg)

OPEC is considering putting a limit on how much oil members Nigeria and Libya can pump, cartel delegates say, as surging production from those countries is complicating the cartel’s plans to influence crude prices.

Libya’s crude-oil output has surged to over one million barrels a day, up from 400,000 in October, while Nigeria’s output has risen to 1.6 million barrels a day, up 200,000 barrels a day since October, according to JBC, a Vienna-based energy-industry consultancy.

Those increases have unnerved the Organization of the Petroleum Exporting Countries, the 14-nation cartel that joined forces last year with Russia and other big non-OPEC producers in an agreement to withhold almost 1.8 million barrels of oil from market every day. Libya and Nigeria were exempted from the obligation to cut because their industries had been crippled by civil unrest.

“Nigeria is definitely becoming a worry for us,” said a delegate to OPEC from a Persian Gulf Arab country. OPEC delegates from several other countries echoed his concerns.